FFM Bulletin 10/22/08 - Freedom Foundation of Minnesota

FFM Bulletin 10/22/08

Hennepin County commissioners voted 5-2 yesterday to increase their own salaries to more than $100,000 per year starting in 2010. A preliminary vote for the pay raises - 3.4-percent in each of the next two years - passed 6-1 in the county's Budget and Investment Committee last week. Commissioners currently make $93,888 per year. According to the Star Tribune, "the percentage increase is identical to the salary range maximum granted by settled county labor contracts for 2008 and 2009." The board's move comes just weeks before they are expected to adopt a $1.7 billion budget for 2009 (a 5.69-percent increase over 2008) including a 6.98-percent property tax increase.

Even with the tax hike, county officials have acknowledged that some service cuts are inevitable. In summary, Hennepin County is taxing and spending more to deliver fewer services to residents, and county commissioners are giving themselves fat paychecks as a reward. On top of that, they do this at a time when credit is scarce, home values are plummeting, and the market struggles to recover. Hennepin County commissioners seem intent on winning the 2008 Political Tin Ear Award.

City of New Brighton throws good money after bad (again)

The New Brighton City Council approved last week a $29,000 study to evaluate the market demand for the city's massive Northwest Quadrant project. The Northwest Quadrant is the largest redevelopment project in New Brighton's history, with plans to transform 100 acres of industrial land into a neighborhood featuring retail, parkland, hundreds of new homes and a half-million square feet of office space. To date, the city has taken private property via eminent domain from 18 businesses in order to make room for the development, despite severe criticism from the public.

The project has also become a notorious black hole for taxpayer money.

The Northwest Quadrant was originally expected to reach a value of $217 million by 2015 but has a current value much closer to $0, following years of questionable policy decisions, financial miscalculations, and government overreach. Since 2001, New Brighton has spent about $60 million for property acquisition, infrastructure, and environmental cleanup. Bitter legal disputes between the city and Rottlund Homes, the project's lead housing developer, delayed the project and eventually led to Rottlund withdrawing from the Northwest Quadrant altogether. And the project is expected to have a deficit of $12 million by 2010. As for the "economic development" that the city promised, there's been virtually nothing to date, and the city still has not settled on a new housing developer.

The government-run Northwest Quadrant project has been, by virtually any standard, a complete disaster.

And now the city will spend another $29,000 for a consulting firm to examine "market demand" for office, residential, and commercial uses in the area. The irony, of course, is there was never a question of market demand until government got involved. Before the city stepped in, 18 businesses had great demand for that property (in fact, they owned it). And there was plenty of public demand for those businesses.

It seems exceedingly unlikely that a single study will help make this project viable. But when you've already thrown away millions of public dollars, what's another $29,000?

Upcoming school referendums

According to the Minnesota School Boards Association, 42 Minnesota school districts have an operating levy referendum on the ballot November 4 and another 13 districts are asking voters to approve bond referendums.

Click here for details on each of the operating levies on the ballot this November.